palmOne Shares Soar on Dell Acquisition Rumor

Shares of palmOne rose more than 12 percent yesterday based on rumors that Dell is interested in acquiring the Milpitas, Calif. handheld device maker. Acquiring palmOne, the leader in handheld sales, would vault Dell to the top position but would run contrary to the formula that has made it one of the fastest growing companies for the past 15 years.

In an interview last November with CNET's News.com, Dell CEO Michael Dell said, "We haven't been a superacquisitive company. We like to grow organically and will probably continue to do so. That doesn't mean we eliminate the possibility of acquisitions, but I wouldn't hold your breath."

Dell currently markets its own line of Axim brand Pocket PC handheld computers running Microsoft's Windows Mobile operating system while palmOne Tungsten and Zire handhelds and Treo smartphones run on PalmSource's Palm OS. Currently only Samsung manufacturers devices running both Palm OS and Pocket PC.

The deal would bring valuable smartphone expertise to Dell and enable it to leap past rival HP in yet another market.

It is not known if palmOne is interested in being acquired by Dell. It has only recently completed its merger with long-time rival Handspring.

Related Links

• Palm and Handspring Merge, PalmSource Goes Independent